Pricing Frequency Restrictions Curb the Initiation of Collusion with Ralph-C Bayer (submitted)
We experimentally test the impact of pricing-frequency restrictions on the price level in a 60 minute, real-time duopoly market. Our unregulated market allows for price changes at any time. We compare this to a real-time market where currently chosen prices are implemented at fixed intervals. Average price levels are significantly lower with price-frequency restrictions. With the help of two additional treatments, we rule out the size of strategic risk, and the decreased possibility of communicating through prices, as drivers of lower price levels in the restricted markets. Instead, discrete pricing periods reduce the ability to successfully initiate collusion by making it harder to establish common knowledge of the mutual willingness to collude.
Interaction Frequency and Cooperation in Infinitely Repeated Games, with Ralph-C Bayer
How does interaction frequency impact cooperation in the context of infinitely repeated games? This paper bridges the gap between the literature on the determinants of cooperation in infinitely repeated games, and experiments that consider how behavioural aspects of timing impact cooperation levels. Our treatments vary the number of price changes per stage game, and the induced discount factor. This allows us to distinguish between the impacts of collusion incentives derived from repeated game logic, the discount factor, and the frequency of interaction. Results show that increased pricing frequency reduces tacit collusion through adaptive pricing. We do not find evidence to support collusion incentives or the discount factor as key drivers of overall collusion levels.
Comparative learnings, with Simon Loertscher
Saving the platypus: automation and public goods provision, with David P. Byrne and Nisvan Erkal
Strategic uncertainty and cooperation in real-time markets, with Ralph-C Bayer and Steffen Huck
Urban rainwater tank grids with real-time control: an economic policy framework, with Darren Bos, Matthew Burns, David Byrne, Rhys Coleman, Tim Fletcher, Stephanie Lavau, Kathryn Russell, Wei Xu